Exhibit
10.5


 


STOCK
PURCHASE OPTION AGREEMENT


 


STOCK
PURCHASE OPTION AGREEMENT dated as of August 31, 2018 by and between FOMALHAUT LIMITED  , a company
organized under the laws of the British Virgin Islands (“SSS”) and SEVEN STARS CLOUD GROUP, INC., a Nevada
corporation (“SSC”),


 


WHEREAS,
until the date hereof, SSS was the record and beneficial owner of an aggregate of 6,482,515 shares of Class B Non-Voting Common
Stock, par value $0.001 per share (the “Class B Shares”) of Grapevine Logic, Inc., a Delaware corporation (the “Company”).


 


WHEREAS,
on even date herewith, the Company redeemed the Class B shares from SSS.


 


WHEREAS,
on even date herewith, the Company issued SSS a right (the “Right”) to acquire 6,482,515 shares of Class A common
stock, $.001 par value per share (the “Company Shares”) following the effectiveness of the merger between GLI Acquisition
Corp., a Delaware corporation (“GLI”), a wholly-owned subsidiary of SSC, and the Company, pursuant to which SSC shall
become a shareholder of the Company and GLI shall cease to exist (the “Merger”).


 


WHEREAS,
SSS is a shareholder of SSC.


 


WHEREAS,
SSC desires to grant to SSS, and SSS desires to obtain from SSC, an option to sell the Company Shares or the Right to SSC,
upon the conditions set forth herein.


 


NOW
THEREFORE, for the consideration set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


 


1.            Option.


 


(a)           SSC
hereby grants to SSS, and SSS hereby acquires from SSC, the option (the “Option) to sell to SSC, at the Exercise Price either:


 


(i)          if
SSS has exercised the Right prior to the exercise of the Option, all but not less than all of the Company Shares; or


 


(ii)         if
SSS has not exercised the Right prior to the exercise of the Option, the entire Right, but not less than the entire Right.


 


(b)          The
Option shall be exercisable during the period commencing on the date following the date upon which the Merger is effective (the
“Exercise Period Commencement Date”), and expiring at 5:00 p.m. New York time on the third anniversary of the Exercise
Period Commencement Date (the “Exercise Period”). SSC agrees with SSS that the Option is granted and all the rights
hereunder shall be held subject to, all of the conditions, limitations and provisions set forth herein.


 




     

     


    

 


2.            Exercise
Price.


 


(a)          The
aggregate exercise price for the Option is the fair market value of the Company Shares as of the close of business on the date
preceding the date upon which the Option is exercised (the “Exercise Price”).


 


(b)          Upon
valid exercise of the Option, the Exercise Price shall be paid by SSC to SSS as follows:


 


(i)          Cash
Consideration. One-third (1/3) of the Exercise Price shall be paid in cash, by check or by wire transfer (the “Cash Consideration”).


 


(ii)         Common
Stock Consideration. The remaining two-thirds (2/3) of the Exercise Price shall be paid in the form of shares of common stock
of SSC, $.0001 par value per share (the “SSC Shares”), valued at the closing trading price on the date preceding the
date upon which the Option is exercised (the “Common Stock Consideration”).


 


3.            Exercise
of Option. The Option may be exercised by SSS at any time during the Exercise Period, upon its presentation and surrender to
SSC, at SSC’s then current principle office address with the Option Exercise Form attached hereto duly executed. Upon the
exercise of the Option, SSS shall sell to SSC, and SSC shall purchase from SSS, the Company Shares for the Exercise Price. The
Exercise Price shall be paid within ten (10) days following the exercise. Payment of the Cash Consideration shall be payable in
United States Dollars and the Common Stock Consideration shall be payable by the delivery of stock certificates for the number
of shares representing the Common Stock Consideration.


 


4.            Investment
Representations. In connection with the granting of the Option by SSC, and the acquisition of the Option by SSS, and the issuance
of the SSC Shares upon exercise of the Option, SSS does hereby represent and warrant to SSC as follows:


 


(a)           Acquisition
for Account. SSS represents and warrants that (i) any SSC Shares that may be acquired by exercising the Option are being acquired
for its own account, for investment purposes and not with a view to any distribution within the meaning of the Securities Act of
1933, as amended (the “Securities Act”); (ii) the Option is not assignable by SSS; and (iii) SSS will not sell, assign,
mortgage, pledge, hypothecate, transfer or otherwise dispose of any of any SSC Shares acquired in connection with the Option unless
(A) a registration statement under the Securities Act with respect thereto is in effect and the prospectus included therein meets
the requirements of Section 10 of the Securities Act or (B) SSC has received a written opinion of its counsel that, after an investigation
of the relevant facts, such counsel is of the opinion that such proposed sale, assignment, mortgage, pledge, hypothecation, transfer
or disposition does not require registration under the Securities Act or any state securities law.


 




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(b)           Investor
Status. SSS represents and warrants further that (i) it is an “accredited investor,” as such term is defined in
Rule 501(a) promulgated under the Securities Act, and, either alone or with its purchaser representative, has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks of the acquisition of the Option
and the SSC Shares; (ii) it is able to bear the economic risks of an investment in the Option and the SSC Shares, including, without
limitation, the risk of the loss of part or all of its investment and the inability to sell or transfer the Option; (iii) it has
adequate financial means of providing for current needs and contingencies and has no need for liquidity in its investment in the
SSC Shares; and (iv) it does not have an overall commitment to investments which are not readily marketable that is excessive in
proportion to net worth and an investment in the Option and the SSC Shares will not cause such overall commitment to become excessive.


 


5.            Legend.
Subject to the termshereof,upon exercise of thisOption and the purchase of the SSC Shares, all certificates
representing such SSC Shares shall bear on the face or reverse thereof substantially the following legend:


 


“The
Shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold,
offered for sale, assigned, transferred or otherwise disposed of unless registered pursuant to the provisions of that Act or such
disposition is otherwise in compliance with an available exemption from such registration.”


 


6.           Adjustments.


 


6.1          Adjustments
for Stock Dividends; Combinations, Etc. In case the Company shall do any of the following (an “Event”):


 


(a)         declare
a dividend or other distribution on its common stock payable in common stock of the Company,


 


(b)         subdivide
the outstanding common stock pursuant to a


stock
split or otherwise,


 


(c)         combine
the outstanding common stock into a smaller number of shares pursuant to a reverse split or otherwise, or


 


(d)         reclassify
or otherwise change its common stock, then the Exercise Price in effect at the time of the record date for such dividend or other
distribution or of the effective date of such subdivision, combination, reclassification or other change shall be changed to a
price determined by dividing (i) the product of the number of shares outstanding immediately prior to such Event, multiplied by
the Exercise Price in effect immediately prior to such Event by (ii) the number of shares outstanding immediately after such Event.
Each such adjustment of the Exercise Price shall be calculated to the nearest cent. No such adjustment shall be made in an amount
less than one cent ($.01), but any such amount shall be carried forward and shall be given effect in connection with the next subsequent
adjustment. Such adjustment shall be made successively whenever any Event listed above shall occur.


 




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6.2           Adjustment
of Exercise Price. Whenever the Exercise Price is adjusted as set forth in Section 6.1, the number of Company Shares specified
in the Option which SSC will purchase shall be adjusted, to the nearest full share, by multiplying such number of Company Shares
immediately prior to such adjustment by a fraction, of which the numerator shall be the Exercise Price immediately prior to such
adjustment and the denominator shall be the Exercise Price immediately thereafter.


 


6.3           Adjustment
for Reorganization, Consolidation or Merger. In case of any reorganization of the Company (or any other corporation, the securities
of which are at the time receivable on the exercise of this Option) after the date hereof or in case after such date the Company
(or any such other corporation) shall consolidate with or merge with or into another corporation or entity, then, and in each such
case, upon the exercise of the Option as provided in Section 3 at any time after the consummation of such reorganization, consolidation
or merger, SSC shall be entitled to receive, in lieu of the securities and property receivable upon the exercise of this Option
prior to such consummation, the securities or property to which SSC would have been entitled upon such consummation if the Option
had been exercised immediately prior thereto, all subject to further adjustment as provided in Section 6.1; in each such case,
the terms of this Option shall be applicable to the securities or property receivable upon the exercise of this Option after such
consummation.


 


7.           Transfer
of Option. This Option may not be sold, assigned, transferred or otherwise disposed of.


 


8.            Lost,
Stolen or Destroyed Option. In the event that SSS notifies SSC that this Option has been lost, stolen or destroyed and provides
a letter, in form satisfactory to SSC, to the effect that it will indemnify SSC from any loss incurred by it in connection therewith,
SSC shall accept such letter in lieu of the surrender of this Option as required by Section 3 hereof.


 


9.           Applicable
Law. This Option is issued under, and shall for all purposes be governed by and construed in accordance with, the laws of the
State of New York, excluding choice of law principles thereof.


 


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intentionally left blank. Signature pages follow.]


 




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IN
WITNESS WHEREOF, the Company has caused this Option to be signed on its behalf, in its corporate
name, by its duly authorized officer, all as of the day and year first above written.


 


	 	By: 	/s/ Grant Deken
	 	Name:	 Grant Deken
	 	Title:	 President


 




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IN WITNESS WHEREOF, each
of SSS and SSC have caused this Option to be signed on its behalf, in its corporate name, by its duly authorized officer, all
as of the day and year first above written.


 


	 	SEVEN
    STARS CLOUD GROUP, INC.
	 	 
	 	By:	/s/ Robert Benya
	 	Name:	Robert Benya
	 	Title:	President
	 	 	 
	 	FOMALHAUT LIMITED
	 	 
	 	 
	 	 	DocuSigned by:
	 	By:	 
	 	Name:	F4D335503751437..
	 	Title:	 


 




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OPTION
EXERCISE FORM


 


Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to such terms in that certain Stock Purchase
Option Agreement by and between Seven Stars Cloud Group, Inc. (“SSC”) and Fomalhaut Limited
 (“SSS”), dated August 29, 2018, to which this Option Exercise form relates (the “Option
Agreement”).


 


The
undersigned hereby irrevocably elects to exercise the within Option dated August 29, 2018 to the extent of (check the box and complete
as applicable):


 


 ̈
1. To sell the Company Shares to SSC


 


 ̈
2. To sell the Right to purchase the Company Shares to SSC


 


In
connection with the acquisition of the SSC Shares by SSS, and the sale of such SSC Shares by SSC to SSS pursuant to the Option,
SSS makes the representations and warranties to SSC set forth in Section 4 of the Option Agreement as of the date of exercise of
the Option.


 


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	 	FOMALHAUT LIMITED 
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	      
	 	 	 
	 	 	 
	 	Address
	 	 
	 	 
	 	Tax Identification Number
	 	 
	 	 
	 	Date


 




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